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Latvia and its education system

This chapter provides a brief description of Latvia’s education system and the context in which it operates. Since independence in 1991, Latvia has experienced continuing demographic decline. Income inequality is relatively high, and not all groups have benefited equally from its recent economic recovery. Latvia has high levels of access to and participation in school and student performance has been improving.

Latvia faces a number of policy challenges. It has developed a highly decentralised education system which has proved both a strength and a weakness. Funding levels are low by OECD standards and fell further during the economic crisis. The education system needs to increase its efficiency and adjust to a declining population and an ageing teaching workforce. Finally, Latvia needs to improve the data it gathers about the education system and improve its ability to use that data in order to improve its education system for the future.

Context

The Republic of Latvia is a country in northeast Europe that is situated on the Baltic sea. it is bordered by Estonia to its north, Lithuania to the south, and the Russian Federation and Belarus to the east. The country had about 2 million inhabitants in 2014 (Central statistical Bureau of Latvia, 2015) in four historical and cultural regions: Kurzeme, Zemgale, vidzeme and Latgale. About one-third of the population reside in Latvia’s capital city, Riga, and one-third in rural areas. Latvia became a member of the European Union (EU) and the North Atlantic Treaty Organization (NATO) in 2004.

Latvia is a parliamentary republic established in 1918 which regained its independence from the Soviet Union in 1991. Legislative power is in the hands of the Saeima, a single-chamber parliament with 100 deputies. The head of the state is the president, who is elected by the parliament for a period of four years. The president signs laws, nominates the prime minister (who leads the government) and performs representative functions. After elections, the Cabinet of Ministers, the highest executive body, adopts a Declaration of Intended Activities which is then transformed into the government’s Action Plan. This plan defines the main results to be delivered by the respective ministries, including the Ministry of Education and Science (MoES).

Latvia’s 110 local governments (novadi) and 9 large “republican cities” (republikas pilsetas) have their own council and administration. Each of these 119 municipalities has significant responsibility and autonomy for public service delivery. They vary considerably in size, ranging from Riga, with about 643 600 residents, to the municipality (novads) of Baltinava with about 1 200 residents. The current administrative structure is the result of a territorial reform in 2009 in which the number of municipalities was reduced from over 500 through amalgamation.

The Latvian population is composed of several ethnic groups. In 2014, it consisted of 61.4% Latvians and 26.0% ethnic Russians with smaller minorities of Belarusians (3.4%), Ukrainians (2.3%), Poles (2.2%), and other small minorities (4.7%) (Central Statistical Bureau of Latvia, 2015). While Latvia has always had a multi-ethnic society, Latvians have always been the largest ethnic group over the past century, and the proportion of Latvians has considerably increased during the past two decades. This is due to large-scale emigration of Russians, Ukrainians and Belarusians whose numbers almost halved between 1989 and 2011 (Hazans, 2013; OECD, 2014a).

For several decades Latvia has experienced a constant decline in population. By 2013 it had lost 276 000 residents since 2003 (14%) and 562 000 since 1992 (22%). This development is due to several factors: an ageing population, low fertility rate (1.52 children per woman in 2013) which for many years has been considerably below the replacement level (Eurostat, 2015a) and fierce emigration which was fuelled by the economic recession of 2008-10. Of the adult emigrants that left between 2000 and 2011 three-quarters were younger than 35 at the time of their departure, including many who were relatively well educated (Hazans, 2013). According to government forecasts, the decline will continue in the years to come, especially among working-age residents. only since 2011 have migration indicators started to improve, with emigration rates falling, coupled with an increase in immigrants. Latvia is also experiencing internal migration (Figure 1.1), mostly from rural to urban areas with approximately 40% of the flow going to the city of Riga (Krisjane and Lace, 2012). These changing demographics have considerable implications for the planning of public services in Latvia.

Figure 1.1. Internal migration in Latvia (2007-12)

Source: state Regional Development Agency (2012), Development of Regions in Latvia 2011, state Regional development Agency, Riga, www.vraa.gov.lv/uploads/regionu%20parskats/Regionu%20 attistiba%20Latvija%202011%20ENG_Q_ia%20kartes%20horizontali.pdf.

Latvia has experienced a volatile macroeconomic climate in recent years. The economy has rebounded strongly from a deep recession between 2008 and 2010 that followed a boom in real estate and the financial sector in the years before, due in part to Eu accession in 2004. since 2011, its economic growth has been one of the highest in the European union. The competitiveness of the Latvian economy is underpinned by low labour costs which in 2013 were at 38% of the Eu average (Ministry of Economics, 2014a).

Despite a steady increase since 2010, Latvian gross domestic product (GDP) still remains low in international terms both overall and per capita. As of 2013, its GDP per capita was EuR 11 600, just 55% of the best-performing oECD countries (oECD, 2015a). It remains below most Eu countries including Estonia and Lithuania, and was less than half of the average of the 28 Eu member states (Eu-28) (Eurostat, 2015b).

Although the bulk of the country’s economic activity is in the service sector, exports recovered strongly following the crisis and have played a major part in Latvia’s recovery. In 2013 the export share of tradable sectors (agriculture, forestry, industry and transport) had increased by almost 10% over 2008 levels. By 2012 exports were 51% higher than their pre-recession peak in 2008 and have gained an increasing market share (Vanags, 2013). In 2012, Latvia’s most important trading partners were Lithuania (18% of total trade turnover), followed by Estonia, Germany and the Russian Federation (10% each) (LIAA, 2014).

The recent recovery is also reflected in improved labour market indicators. The unemployment rate for the total labour force (aged 15 to 74), which reached a peak of 19.5% in 2010, dropped to 10.8% in 2014 (Eurostat, 2015c) (Figure 1.2). While youth unemployment is also decreasing, it is still higher than in other age groups: 19.6% of 15-24 year-olds were unemployed in 2014 which was higher than the OECD average of 15.0% (OECD, 2015b).

Figure 1.2. Unemployment rate and real GDP growth in Latvia, compared to EU-28 average, percentage (2006-13)

Sources: Eurostat (2015c), “Total unemployment rate”, Eurostat database, http://ec.europa.eu/eurostat/ tgm/table.do?tab=table&init=1&language=en&pcode=tsdec450&plugin=1; Eurostat (2015b), “Real GDP growth rate”, Eurostat database, http://ec.europa.eu/eurostat/tgm/table.do?tab=table&init=1&lan guage=en&pcode=tec00115&plugin=1.

In 2012, 86% of 25-64 year-olds with a general tertiary qualification and 92% with a professional tertiary qualification were employed in Latvia. Among adults with just an upper secondary qualification the rate was 66%. For adults with only a lower secondary qualification this percentage was 53% (oECD, 2014b). The educational profile of the unemployed shows that vocational and general upper secondary education graduates represent over 60% of the unemployed, those with basic education another 20%. Among the economically inactive, those with only basic education dominate (oECD, 2015a).

national minorities were hit disproportionally by the economic crisis in terms of employment. The factors behind these outcomes have not yet been fully identified, but work experience and skill sets, including relatively weaker Latvian language ability, are likely to be relevant (oECD, forthcoming, 2015a; Falco et al., 2015a; Lehmann and Zaiceva, 2015).

Despite the improved economic situation in recent years, unemployment rates in Latvia are still above OECD and Eu-28 averages despite improvements in recent years, with various sources pointing to emerging skills mismatches (IMF, 2014; OECD, 2015a). A recent OECD report (2015a) concluded that given the low participation of adults in lifelong learning - in 2014 a mere 5.5% of 25-64 year-olds participated in both formal and non-formal education and training - and persistent informality within the Latvian economy, many of the working-age population lack the skills to become more productive.

Poverty and inequality remain major challenges for Latvia. In 2014, 32.7% of the population was at risk of poverty or social exclusion which is considerably lower than three years before (40.1%) but still much higher than the EU-28 average of 24.5% (2013) (Eurostat, 2015d). Income inequality is also high compared with EU and OECD countries (Zasova and Zdanovica, 2014; OECD, 2015a; Eurostat, 2015e). Spending to protect the most vulnerable is low, with social spending amounting to only about 15% of GDP, compared to the EU average of 28%. Relatively low levels of income redistribution and the fact that a number of benefits are universal (state family benefit, childcare benefit, child birth grant) have resulted in a greater proportion of social benefits going to the richest quintile than to the poorest. This suggests the need for better targeting (OECD, 2015a).

Considerable disparities also exist between regions and municipalities. The Latgale region in particular has many disadvantaged municipalities, with high unemployment rates, low tax revenue and negative migration flows. In 1995 the Financial Equalisation Fund was established to address regional inequalities and there is also special state funding for municipalities with the lowest estimated revenue per inhabitant after financial equalisation. Nevertheless, regional disparities still remain substantial (oECD, 2015a). The government in 2015 adopted a new local government financial equalisation law that will be applied to the local government equalisation calculation for 2016 and subsequent years. The new system is based on revised principles to evaluate demographic criteria, average local-government incomes and proportionate distribution of subsidies from the state budget so as to bring all local governments closer to the level of those with the highest incomes per capita. it also takes into consideration projected personal income tax revenues, property tax revenues and macroeconomic forecasts.

Latvia has also developed a polycentric development policy aimed at strengthening the competitiveness, accessibility and attractiveness of the 30 largest urban areas (Figure 1.3):

  • • 9 national development centres - republican cities or urban municipalities (more than 20 thousand inhabitants, of which 5 have more than 50 thousand inhabitants).
  • • 21 regional development centres - towns in urban-rural municipalities (5 to 20 thousand inhabitants).

This network of centres is intended to provide a territorially balanced distribution of functional urban areas across Latvia, providing jobs and public services to all residents in urban and rural areas, and driving growth in the regions.

Under the polycentric development policy, Latvia has defined a set (“basket”) of public services for each level of settlement - national, regional, local development centres and rural areas. Provision of basic services is made as close as possible to the people while other services are concentrated in the 30 largest urban areas. The framework aims to support the rationalisation and amalgamation of services in particular sectors (e.g. health, culture, sports, education and social care) at each level of settlement. The European Union is financially supporting the implementation of the framework (MoES, 2015).

The National Development Plan 2014-2020 (CSCC, 2012) addresses income inequalities through measures which include decreasing the tax burden for low-income households and promoting family support services, as well as fighting youth unemployment. Promoting high-quality vocational education, lifelong learning and tertiary education are key components of Latvia’s strategy to reduce inequalities in income and poverty and bring prosperity throughout Latvia.

Figure 1.3. The Latvian polycentric development structure

Source: ministry of Environmental Protection and Regional development (2010), Teritoriala pieeja atbalstaplanosana un sniegsana [Territorial Approach in Planning and Providing support], ministry of Environmental Protection and Regional development, Riga, www.varam.gov.lv/in_site/tools/ download.php?file=files/text/publikacijas/publ//TeritPieejaAtbPlansnieg.pdf.

 
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